OGRA moves against CNG stations in residential areas

Issues 1,000 show cause notices citing public safety concerns.

ISLAMABAD:

The Oil and Gas Regulatory Authority (Ogra) has issued show cause notices to over 1,000 CNG station operators, asking them to justify why they have set up outlets in residential areas. Licences given to operators may be cancelled in case they fail to satisfy the regulator. The move is expected to lead to the closure of hundreds of CNG stations operating in residential areas across the country.

Ogra says the move is part of a strategy to control accidents involving CNG cylinders and to mitigate gas shortages. At present, over 3,000 CNG stations are operating in the country, a large number of which are located in residential areas.

A senior Ogra official confirmed that the show cause notices had been issued, while putting part of the blame for the setting up of CNG stations in residential areas on the provincial governments. He said that provincial governments had allegedly changed the rules of the Buildings Act.

He said 360 identified CNG stations, which are located dangerously close to mosques, schools and hospitals, will have their licences cancelled due to public safety issues. The official said that a number of these identified stations are located in Karachi.

 

He defended the decision, saying that that show cause notices had been issued following rules and regulations, and that station operators will have to justify the location of their businesses. “If they fail to justify, their licenses will be cancelled,” he repeated.

Through the show cause notices, CNG operators have been asked to explain under which policy they had established outlets in residential localities and what measures they have taken to ensure the safety of people living around them.

In the recent past, Ogra has already directed all transport authorities to launch a crackdown on vehicles fitted with uncertified CNG and LPG cylinders. Ogra had also imposed a ban on the use of CNG in wagons which had fitted CNG cylinders beneath passenger seats in May. However, this ban did not apply on vehicles with that had cylinders fitted on their roofs. Ogra’s raiding parties had disconnected the gas connections of 22 CNG filling stations after confirming a violation of the ban in different instances.

Like the past government, the incumbent government has made phasing out the CNG sector part a of its energy policy. It wishes to divert the gas to the power sector to help overcome a raging energy crisis. The petroleum ministry has already proposed that CNG prices be brought at 85% parity of petrol to discourage its use in auto sector. However, the government has yet to take a decision in this regard.

The All Pakistan CNG Association (APCNGA) criticised Ogra’s decision, claiming that the regulator had become part of a “conspiracy” against the CNG sector. The APCNGA also dismissed the show cause notices as “illegal”.

“All petrol pumps and CNG operators had obtained No Objection Certificates from twelve different government departments before commencing commercial operations under the policy laid down by the Ministry of Petroleum,” said Ghiyas Abdullah Paracha, chairman of the APCNGA Supreme Council.

Paracha said all these departments should be held responsible for harassing the masses and the investors who had invested around Rs400 billion in the “vibrant” CNG sector.

He said that Ogra itself had allowed the construction of all CNG outlets on their current locations. Paracha said that targeting CNG stations on the pretext of public safety is a conspiracy, as all business in the residential areas is established on commercial patches after due permission from authorities.

Published in The Express Tribune, July 5^th, 2013.

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